Glossary

A/B Testing

An experiment used in online marketing to optimize a website, email campaign etc. The method includes changing one variable (e.g. color of a button), while all other conditions remain constant. Randomly, one of the two versions (A and B) is shown to the visitor to test the effect of the change (e.g. by monitoring conversion rates).

ADR (Average Daily Rate)

Total room revenue divided by number of rooms sold, e.g. EUR 20,000 / 250 rooms sold = EUR 80 ADR.

ADS (Alternative Distribution System)

Used as a synonym for distribution via 3rd party websites, whereas we usually speak about the hotel distribution via online travel agencies. (also see IDS and OTAs).

AdSense

AdSense (a Google service) enables targeted, context-related advertising (via text, picture or video) on websites. As advertisements are targeted, the click rates can be increased and the website’s owner receives a share of the profit. AdSense is the counterpart of Google’s AdWords (see definition).

AdWords

This Google service enables targeted keyword-advertising. The advertisements must meet special requirements, e.g. the headline should not exceed 25 characters and the text should not have more than 35 characters. AdWords advertising campaigns can be found across the Google Network (which includes the Search Network and the Display Network).

Affiliate Marketing

Type of online marketing where a website owner (publisher/affiliate) provides advertising space to another business (advertiser/merchant) to place a linked advertisement. The merchant pays a performance-based commission, which can be based on different models. (also see CPC, CPL, CPO, CPS).

Affiliate Website

Affiliate programs, mostly based on a commission model, are intended for partner-websites, offering ancillary products or services or addressing a similar target group. Thus, hotel chains’ affiliate partners are often airlines.

AJAX (Asynchronous JavaScript and XML)

Refers to a method used for programming interactive web applications. The special thing about AJAX is that data is exchanged asynchronously between browser and server, which results in reduced loading times and, thus, leads to improved usability of web applications.

Allocations Management

In the hospitality industry, allocation (also allotment) is often used when optionally holding a number of rooms for a customer that can be picked up based on specific terms and conditions. Usually, hotel allocations are given to foreign inclusive tours wholesalers in order to be integrated in tour operator programs while gaining exposure in foreign markets alongside the competition and giving tour operators commitment to some availability in return.

ALOS (Average Length of Stay)

Total number of room nights divided by number of reservations, e.g. 100 RN / 50 RES = 2 nights ALOS.

Alt-Text (also known as alternative text)

A technical functionality of a website page e.g., to describe pictures. This technique enables search engines to read specific document types which cannot be recognized otherwise.

Ancillary Sales

The sale of additional products and services offered along with the sale of the core product. In the hotel industry, ancillary sales can include services offered by the hotel itself at an extra cost (e.g. F&B or wellness) as well as products offered by third parties, such as theater tickets.

API (Application Program Interface)

An API is an interface, enabling data exchange between different applications or systems. For example, the Google Maps API enables embedding Google Maps on another website or into a mobile application.

Auction Site

A website, where the price of a product or service is determined by the winning bid. Examples are Ebay and Name Your Own Price (Priceline).

Backlinks

Backlinks are incoming links (also called inbound links) to a website or web page. With the increasing number of backlinks, they become increasingly significant for search engine optimization (SEO).

BAR (Best Available Rate)

Is the lowest non-restricted rate available for all bookers. This rate can change several times a week up to several times a day.

Booking Curve

The booking curve constitutes an essential tool for yielding as it reflects the number of bookings over time (so-called pace) and compares this with the hotel’s available room capacity.

Booking Window

The booking window is a defined period, which a hotel has set for receiving bookings for a specific stay date.

Bounce Rate

Shows the percentage of users that leave the website straight away after clicking on the landing page.

Channel Management (also Multi-Channel-Management)

Channel management refers to the employed distribution policy of a hotel or chain. Due to today’s multitude of sales channels, this management method includes content management as well as data reconciliation in various distribution channels such as CRS, GDS and 3rd party websites. The core of the process is the management of room rates and availabilities across all channels.

CMS (Content Management System)

A CMS is a computer application used to create, edit and manage various content types and data. For websites, Typo3 is a common CMS system; for GDS content loading, Lanyon and Trust Content are among the well known CMSs.

Commission

Travel agencies charge commissions (usually in % of the room rate) for selling hotel rooms.

Competitive Set

A group of competitive properties is defined (based on carefully selected criteria such as location, business type, star rating, guest review scores, etc.) to benchmark the hotel’s performance.

Consortia Rate

Consortia are corporations, syndicates, franchises or business travel agent chains such as American Express, Carlson Wagonlit, BCD Travel or HRG. The consortia rate is negotiated between the hotels and travel agencies and is only available to contracted consortia.

Content

Hotel content can be clustered into three different types: dynamic content (i.e. rates and availabilities), static content (i.e.  general features and amenities existence and descriptions) and visual content (i.e. images and videos). Both the quality of content as well as content parity across third party distribution channels is a challenge and yet an important element of guest satisfaction.

Content Management

This is a general term for management and revision of static and non-static hotel information (e.g. rates, terms & conditions, hotel descriptions, photos etc.) in the different distribution channels.

Content Marketing

Content Marketing is the strategic optimization of rates and availabilities, descriptions and pictures/videos with the goal to address a specific target audience via different distribution channels.

Conversion Rate


This rate describes the percentage of website visitors (lookers and shoppers), which actually turn into buyers after using a website clicking on an advertisement.

CPC (Cost Per Click)

Is a common commercial business model for online marketing activities. Each click on a particular advertisement has to be paid to the service provider (cost caps are possible in most cases).

CPL (Cost Per Lead)

Is a commercial business model for online marketing activities. Advertisements are paid per sales lead. This model is common for advertisements aiming to increase recognition and first customer contacts – it is less aimed to increase direct bookings.

CPM (Cost Per Mille)

This term defines the price for an advertisement reaching a total of e.g. 1,000 people.

CPO (Cost Per Order)

CPO is a mathematical calculation of the costs incurred in selling an item (e.g., room) divided by the number of orders received (e.g., room nights). It is used to examine the relative profitability of various promotions. The CPO ratio can be used to evaluate the effectiveness of advertising expenses.

CRM (Customer Relationship Management)

CRM is the method and concept being used to manage customer relationships, e.g. with guests or a qualified set of guests. CRM is used for targeted customer communication and customer engagement, and requires that all customer data and customer interactions/transactions are saved in databases. The data is integrated/processed within the company and used for special purposes such as mailing campaigns and personalized promotional offers etc.

CRO (Central Reservation Office)

There can be a single or several central reservation offices within a company which handle telephone reservations through a central telephone number. The CRO of a hotel chain is capable of booking hotels in different destinations with one single call. Forwarding of the booking is mostly carried out via a CRS and/ or PMS (also see CRS and PMS).

CRS (Central Reservation System)

The CRS is essentially a database distribution system, providing hotel room rates and availability for many different channels such as the GDS, 3rd party websites and brand websites etc. Among other functionalities, the CRS can administer room allocations of single properties or on hotel chain level. Furthermore, rates can be controlled and availabilities in the distribution channels can be monitored. The CRS of a hotel chain transfers data to the distribution channels.

CTA (Closed to Arrival)

Revenue Management restriction for room availability: reservations starting their stay on that particular day are not possible.

CTD (Closed to Departure)

Departure on a particular day is not possible.

Direct Connect

A direct connection for data interchange and synchronization, e.g. between CRS and OTA. A direct connect eliminates extranet maintenance for rates and availabilities. A common standard interface is the so called XML interface, which enables real-time rate and availability updates. In most cases, OTA reservations are then automatically sent to the hotel via the CRS (or PMS, depending which system is used to directly connect to the OTA).

Dynamic Content

Dynamic content is one of three content types. It refers to hotel information which is continuously being updated, such as rate values and availabilities.

Dynamic Packaging

This method combines inventory (rates and availability) from multiple sources e.g., hotels, rental cars and flights in one online application. It allows the customers to create and book a customized itinerary resulting in a higher flexibility compared to pre-packaged holidays.

Dynamic Pricing

A revenue management strategy, based on a specific rate model for revenue optimization (e.g., by changing room rates daily) and changing according to market demand. Specific rates and restrictions are combined for one product. Consortia/negotiated rates are no longer fixed (in some cases). By linking to the BAR (also see BAR), they now fluctuate with any BAR change.

E-Commerce

E-commerce is an Internet based business and also known as virtual or electronic market place in connection with online sales. A trade and service relationship develops between the merchant and the customer which can vary in form and complexity.

E-Marketing

E-marketing is Internet based including tools such as pay-per-click lead generation and paid advertising. Electronic distribution systems can also be used for e-marketing, since they facilitate the communication between service suppliers, 3rd party providers and customers.

Extranet

A distribution channel which is administered externally, e.g. HRS (OTA for hotels) prefers rates and availability to be updated by logging into HRS's extranet system.

Follower

An online community user that follows a special profile (e.g. person or company). For example, this expression is used by Twitter, whereas Facebook followers are referred to as fans.

Free-flow Text

In contrast to automated text generated by a system e.g., extranet, free-flow text can be independently edited by the user.

Gadget/Widget

Widgets are small independent programs included in the graphical design of a website. Examples are RSS-Feeds, Social Bookmarks etc. Typical Gadgets are more unusually or cleverly designed than normal technological objects at the time of their invention.

GDS (Global Distribution System)

GDSs were formerly used as international reservation systems by the airline industry in collaboration with travel agencies. Besides flights, hotels, rental cars or train tickets can nowadays also be booked via the GDS. The market is shared among four main GDSs: Amadeus, Galileo, Worldspan and Sabre. All licensed travel agencies have access to the GDS via computer terminals. The main revenue drivers for hotels are travel agency consortia, using the GDSs predominantly for corporate travel bookings. The GDSs also distribute rates to 3rd party websites; so called GDS-powered websites.

(GDS) Switch

A switch is a system component in the worldwide electronic distribution infrastructure which serves as a link between all GDSs and the CRS of a hotel chain. The switch transfers data (primarily rates and availabilities) from the CRSs to the GDSs and back. Reservation data are being sent from the GDSs through the switch company to the hotel CRS.

GOPPAR (Gross Operating Profit Per Available Room)

Gross operating income of a hotel per available room.

GUI (Graphical User Interface)

General term for graphical desktop or user interface. The GUI (front end) is used to access the database (back end) via the IT application, e.g. the Amadeus Selling Platform GUI is used to access the Amadeus GDS database.

HCD (Hotel Content Database)

The HCD, formerly ODD, is a content database service offered by Pegasus, including text, images, geo-coding, contact information etc. from hotels in multiple languages. It is most commonly used together with the Pegasus Switch, which delivers rates and availability for hotel rooms. The HCD is typically used to transmit content in a customized way to OTA websites eliminating the need for the hotel to maintain content manually in the Extranet. Hybrid-models are common as well.

IBE (Internet Booking Engine)

An IBE is an online application which allows to book any kind of travel on the Internet. Rates and allocations are displayed in real time and allow to display an instant confirmation to the customer of the service or product booked. IBEs exist as standalone applications, e.g. to book only hotel rooms on a hoteliers’ website. In this case, the IBE is mostly directly connected to the hotel CRS or PMS (see also CRS and PMS). Other IBEs combine multiple services, e.g. hotels, flights and rental cars and may be integrated from a 3d party vendor into the website.

IDS (Internet Distribution System)

This term is generally used to express the hotel sales via the Internet. It is also known as a synonym for distribution via 3rd party websites and ADS (see also ADS).

Instant-Messaging

This online communication service enables users to see if friends or acquaintances are also online, e.g. via Yahoo! Instant Messenger. It allows real-time direct communication via text messages.

Interface

The crossing point or technical connection between different IT systems, one function e.g. could be downloading reservations from a hotel's CRS to the PMS via a 1-way interface.

LCR (Local Company Rate)

Local corporate contracts that are negotiated between hotels and companies, e.g. fixed corporate rates exclusively for a certain company (usually valid for one year).

Look to Book Ratio

The ratio of website visitors (e.g.100) vs. the number of bookers (e.g. 5) of a particular website. In this example, the look-to-book-ratio is 5%.

LRA (Last Room Availability)

Guaranteed availability until the last physical room is sold out (e.g. often requested by corporations and/ or travel agency consortia).

Market Segments

Differentiation of customer segments to organize target group-specific sales activities, e.g. IND=individual traveller.

MaxLOS (Maximum Length of Stay)

A function of revenue management: Maximum length of stay is used as a restriction and controlling tool for room availability for example.

Merchant Model

A number of 3rd party websites (e.g. Expedia) contract merchant rates where the hotel usually obtains a preferred ranking displayed on the intermediates’ website – this is achieved via special rate and allocation agreements. Thus, hotels provide net rates to e.g. OTAs or tour operators which then add their markup, forming the end price for consumers.

Metasearch Site

A metasearch website specializes in e.g. travel content and filters flight and hotel availability (among others) according to user-defined search criteria. It compiles rates from multiple 3rd party websites and displays the result on a single site. The user is transferred to the selected 3d party site to complete the booking (examples are kayak.com and trivago).

Micro-Blog

Defines a blog which is limited in terms of character usage per posted message. A popular example is the “Twitter” platform where “Tweets” can contain a maximum of 140 characters per message and pictures can be attached and linked to.

MinLOS (Minimum Length of Stay)

Minimum length of stay is used as a restriction and controlling tool for room availability within the revenue management process.

Negotiated/ Secured Rates

In the hospitality industry, these rates are contracted rates that are not publicly available and which can also be booked via the GDSs, IBEs and call centers. A prerequisite for a secured rate is an access restriction which is controlled through rate access codes and pseudo city codes (PCC) in the GDSs.

Net Rate

Net rates (i.e., sell rates excluding commissions/mark-ups) are required by some OTAs and wholesalers maintaining a merchant business model.

NGS (Next Generation Seamless)

Next Generation Seamless integrates CRS and/or PMS information directly with the GDS, which exactly match the hotel’s own data. Thus, avoiding delays and errors and providing real time information to travel agents.

OBE (Online Booking Engine) = IBE = WBE

See IBE.

Occupancy

Defines the percentage of all occupied rooms at a given time. The occupancy rate is calculated by total rooms sold divided by number of total rooms available, e.g. 250 rooms sold / 400 rooms available = 62.5 % occupancy.

ODD (Online Distribution Database)

Now renamed to HCD (Hotel Content Database). See HCD.

Opaque Sites

An OTA website that offers a certain product category (e.g. a 4 star hotel room) for a certain price. The shopper only sees the category offered, but not the specific product (e.g. hotel name or brand) – product details are only disclosed after the purchase. Examples are Hotwire, Secret Hotels at Lastminute or Travelocity.

OTA (Online Travel Agency) = ADS = IDS

A website, allowing consumers to book various travel related services directly via the Internet. Examples include Booking.com or Expedia as well as many local or regional sites.

OTA (OpenTravel Alliance)

An organization that provides a community where companies in the electronic distribution supply chain work together to create an accepted structure for electronic messages, enabling suppliers and distributors to speak the same interoperability language, trading partner to trading partner (www.opentravel.org).

Pace

Pace (also called pick up) defines the rate of bookings (number of bookings by every single day prior to a specific stay date).

PCC (Pseudo City Code)

Is a GDS code, which identifies the location of a travel agency. This code is important to insert Negotiated Rates.

Permalinks

Is a term for permanent links, which enable users to retrieve articles, especially from chronologically posted weblogs.

Pick Up

Pick up (see Pace) defines the rate of bookings made for a specific stay date.

PMS (Property Management System)

Local hotel administration system used e.g. for reservation, availability and occupancy management, check-in/out, folios, guest profiles, and report generation. The interface to a CRS is an additional option in order to transfer availability, reservation and guest profile information for example. Additionally, various interfaces are available to create further links to internal and external systems such as room key systems, restaurant and banquet cash registers, minibar, telephone and call centers.

Private Label Chain Code

Refers to an individual 2-letter code of a hotel chain which is used within the GDSs, e.g. SR for Steigenberger Hotels & Resorts.

Public Label Chain Code (Umbrella Chain Code)

Refers to one general 2-letter code for all represented hotels and hotel chains, e.g. WW for Worldhotels.

Rate Parity

Common hospitality industry term used to describe a rate strategy which offers the same rate with the same conditions for a particular room type in all distribution channels.  As the Internet provides a high level of price transparency, rate parity strengthens the customer’s faith in receiving a competitive offer and may even encourage brand loyalty.

Representation Company (Distribution Partners)

Distribution and marketing companies such as The Leading Hotels of the World, Top International Hotels, Utell or Worldhotels which support the hotels with their international distribution. A uniform market representation under a common GDS chain code is typical for this marketing strategy.

Revenue Management (Yield Management)

This term describes an instrument for a simultaneous and dynamic price and capacity controlling method (based on real time forecast of current demand). With the help of a permanent calculation on a micro level (single rate groups) demand patterns can be determined and pricing models calculated. Consequently, Revenue Management is a particular kind of price discrimination which varies by different levels, e.g. by certain weekdays/holidays or by released room allocations (once an allocation is utilized, the according rate or rate group will become unavailable). The goal is to optimize revenue with the support of an intelligent and dynamic pricing strategy. Airlines were the pioneers in the field of revenue management.

RevPAR (Revenue Per Available Room)

RevPAR is an important metric for the hotel industry in order to compare hotels of different sizes. It is measured by total room revenue divided by total rooms available, e.g. EUR 20,000 divided by 400 rooms available = EUR 50 RevPAR.

RFP (Request for Proposal)

RFPs are tenders for certain services. In the hospitality industry, this term describes the annual consortia and negotiated corporate rates negotiation process between hotels (suppliers) and travel management companies or corporations (demanders). h2c supports hotel chains that search for new distribution solutions. For more information, please visit our Strategy page.

RMS (Revenue Management System)

Software or system solutions for Revenue Management, supporting real time analysis of supply and demand patterns, and administrating particular pricing strategies by providing automated price calculations and recommendations.

RSS (Really Simple Syndication)

Technology used to send content or parts of messages to subscribers via “Feeds“. RSS is either a software application, which is able to read feeds or a small plug-in, required to read the feed. New information is automatically sent to the subscriber.

Semantic Web

Semantic Web is described as an extension of the current world wide web which envisions to make information menaingfuel to computers in a way that data, documents and information can be interpreted by non-humans. Information, people, destinations and things could be linked through Semantic Web which is based on the idea of artificial intelligence.

SEM (Search Engine Marketing)

SEM encompasses all measures that lead to finding websites quicker and more effectively via search engines (e.g. Google, Bing and Yahoo). Often SEM refers specifically to paid search engine advertisement (e.g. sponsored links, key word reservation via AdWords etc.).

SEO (Search Engine Optimization)

SEO aims to reach a high organic (non-paid) ranking on the search result page of search engines and to achieve the highest possible customer perception. The idea behind SEO is to optimize and structure website content, best meeting the search criteria of search engine algorithms including technical elements of a website such as meta information or actual content within the site (text, pictures, videos, links). This can be done complimentary to SEM or separately as an alternative.

SMM (Social Media Marketing)

Defines a community form of online marketing. Companies seek to reach online marketing goals by communicating directly on social media platforms.

SMO (Social Media Optimization)

Stands for the optimization of a website, e.g. to be found easier by social media services.

Static Content

Static content is one of three content types. It refers to hotel information which is not subject to regular updates or changes, such as general hotel facilities or room features. Beside visual and dynamic content, static content has become increasingly important to improve so called “content scores” with OTAs.

Third (3rd) Party Websites

Websites from external (third) companies such as Expedia or Opodo which offer flights, hotels, rental cars and similar services through a consolidated search functionality.

TinyURL

URL (Uniform Resource Locator) is the address of an internet website. TinyURL indicates a service, which can shorten the characters of a URL. TinyURLs are often used for services such as Twitter. It eases propagating URLs in the community.

Travel Agency Consortia

Travel agency chains or franchise organizations such as American Express, BCD Travel, HRG, Carlson Wagonlit or Radius. A distinction is made between internationally and nationally operating consortia.

Turn-away (= Denial)

A turn-away is a specific reservation request that the hotel cannot accommodate for any particular reason.

Tweet

Is a short message on Twitter’s micro blogging platform. Only 140 characters are allowed for each message.

Unique Visitor

Defines the number of visitors calling up a website during a specific time period. Only unique visitors are registered during the period, even if a single visitor has accessed the site multiple times.

Visit

A website visit by a user who is identified by his or her IP address.

Visual Content

Visual content is one of three content types. It content refers to images and videos showing the hotel’s general facilities and room features. As such it constitutes a key component in bookers’ decisions.

Voice

Summary of all distribution channels based on telephony, Call Center and CRO.

WBE (Web Booking Engine)

See IBE.

XML (Extensive Markup Language)

A web programming language and also synonym for a web interface between a CRS and a website front end.

Yield Management
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